Continuing Care Retirement Communities
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 3,800 continuing care retirement communities (CCRCs) in the US provide assisted living with on-site skilled nursing facilities, independent living, assisted living, and skilled nursing services either on campus or at nearby facilities. These facilities involve a contract each resident signs, entitling them to a continuum of care in exchange for payment of an entrance fee and ongoing monthly fees.
Sensitivity to Capital Markets
Difficulty in obtaining financing or in re-financing existing debt can force CCRCs to delay needed renovations, postpone planned expansions, or prevent them from breaking ground.
Demographic Trends Grow Demand
Since January 2011, baby boomers have been turning age 65 at a rate of 10,000 per day - and this will continue for 20 years.
Industry size & Structure
The average CCRC has about 123 employees and generates $10.8 million in annual revenue.
- There are about 3,800 CCRC firms in the US operating 5,400 facilities with $41 billion in annual revenue and 468,000 employees.
- About half of facilities are "true" CCRCs offering care from independent living through skilled nursing under a contract that guarantees a continuum of care in exchange for an entrance fee and ongoing monthly fees.
- About half of "true" CCRCs are affiliated with faith-based organizations, such as Presbyterian, Lutheran, Methodist, or Catholic churches.
- Companies that own and operate multiple communities include Life Care Services and Erickson Living.
- CCRCs are located in a range of geographical areas from urban to suburban to rural.
Industry Forecast
Continuing Care Retirement Communities Industry Growth
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Recent Developments
Jul 16, 2024 - Intensive Survey Process Increases Costs
- The severity of the continuing care retirement community (CCRC) survey process is increasing the cost to care for skilled patients, according to Skilled Nursing News. Some CCRCs have decided to partner with existing skilled nursing operators – rather than own their own SNFs – as costs and regulatory issues compound, according to Stu Almer, CEO of Gurwin Healthcare System. CCRCs are required to have a SNF referral option, but an organization doesn’t need to maintain their own facility, he said. “Everyone [in skilled nursing] is reevaluating,” he said, "asking themselves if they should downsize, sell, or convert into some other type of housing."
- The minimum staffing rule that most nursing homes will be required to meet within the next three years will not affect credit ratings of continuing care retirement communities (CCRCs) according to Fitch Ratings. The rule will add to staffing pressures at continuing care retirement / life plan communities, but ratings will not be affected because although most CCRCs contain a skilled nursing component, they also include other service lines, such as independent living and assisted living, and can adjust the number of skilled nursing beds in service, according to Fitch. “Private-pay [independent living] units, which are a key driver of financial performance and generally comprise the largest number of units at Fitch-rated [life plan communities], are not subject to the proposed staffing requirements,” noted Gary Sokolow, Fitch director of US Public Finance, and Sarah Repucci, Fitch senior director of credit policy – research.
- There has been a 4% drop in the number of retirement communities in the US over the past five years, according to the Best States to Retire 2023 report from financial research firm Scholaroo. Texas, California, and Ohio — which have the highest number of retirement communities — showed an average drop of 2.6% in the number of retirement communities. Florida was the only one of the 10 states with the highest number of retirement communities to show growth, with an increase of 0.72%.
- Continuing care retirement community industry employment increased slightly during the first five months of 2024 while average wages for nonsupervisory employees decreased slightly, according to the US Bureau of Labor Statistics. Continuing care retirement community industry sales are forecast to grow at a 4.74% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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